Widening of North-South divide - a myth

The Datamonitor research* has revealed that the split has narrowed when measured by financial assets**.

Michele Gorman, financial analyst at Datamonitor, said: "It is clear that when it comes to income and assets, the recession does not recognise the North-South divide.

"Although the south is "richer" in terms of the relative size of its affluent population compared with the north, this population has taken more of a beating during the economic downturn, contracting more sharply than the affluent population in the north. In terms of higher earners our research has shown that the northern and southern populations suffered equally."

Datamonitor's research into regional wealth and income in the UK has revealed that the divide was narrowing before the recession.

South sees more significant decline

In 2006 the number of affluent individuals living in the North grew by 7.7% compared to 6.2% in the South. Thus, the gap between the populations actually narrowed. In fact the North East and Yorkshire and the Humber were home to the fastest-growing affluent populations in the UK in 2006.

And during the recession, the South witnessed a much more significant decline in its affluent population compared to the North. London's affluent population saw a severe reversal of fortune, contracting by 21.5% (this equates to 350 000 people sliding out of the 'affluent' category).

Gorman continued: "Our research has revealed that the South was even more negatively affected than the North by the recession in terms of financial assets and, to some extent, annual income. One factor could be the high concentration of jobs in the financial service industry in the South.

"However a key question is, as the economy recovers will the divide continue to narrow? Our forecasts indicated that affluent populations in both the North and the South grew in 2009 but 2010 is slowing as the recession lingers."